Southern Cross Austereo (SCA) has hit back at an article by the Australian Financial Review (AFR) that describes its contract with the Australian Traffic Network (ATN) as “a poison pill” as factually inaccurate and misleading.
The AFR reported that “Southern Cross’s $100 million traffic data sharing agreement signed with Australian Traffic Network (ATN) in 2016 under then-CEO Grant Blackley contains a slew of clauses that are proving to be unpalatable to suitors”.
The article argues that SCA has failed to disclose the agreement with ATN and that the contract’s leftover value of $89 million is a sticking point for any potential sale.
SCA said that it has previously disclosed details about its 20-year contract with the ATN that expires in 2036.
The ATN paid an upfront payment of $100 million to in addition to ongoing payments to provide traffic reports on SCA’s metro and regional radio stations.
“Given the long-term nature of the contract and the significant up-front payment, the contract deals with the circumstances in which SCA wished to terminate or amend or no longer fulfil its obligations, which would be the case if SCA were to sell its radio stations,” the SCA statement read.
“However, importantly, the contract would not be affected by any change in control of SCA including a takeover bid or scheme of arrangement involving an acquisition of 100 per cent of the shares in SCA. The AFR article is materially incorrect and misleading in this respect.
“The ATN contract is not relevant to SCA’s current negotiations regarding the sale of its television assets. SCA will continue to update the market about those negotiations in accordance with its disclosure obligations.”
SCA said that it had disclosed details of the contract, with ATN’s permission, in negotiations with suitors, including a consortium of Anchorage Capital Partners and ARN Media.
ATN told B&T it had nothing further to add to SCA’s statement.
